New City Council plans to vote on 11 referendum-immune ordinances on Wednesday

Mayor John Cranley and a majority of City Council appear ready to halt Cincinnati’s $132.8 million streetcar project on Wednesday — and voters might not get a final say on whether they approve of the pause.

In front of council are 11 ordinances totaling $1.25 million that would stop contracts tied to the streetcar project while the city hires expert consultants to review the costs of continuing or suspending the project.

“I think cancellation is what we should do,” Cranley said at Monday’s council meeting. “But a majority of council wants to pause and ask questions.”

One immediate concern for supporters of the project: Because the ordinances appropriate funds, they are not susceptible to referendum.

Cranley repeatedly touted the “people’s sacred right of referendum” in opposition to the parking privatization plan while on the campaign trail, but he now argues the city shouldn’t be forced to continue spending on the streetcar project until voters make a final decision in November 2014, as would be required under a traditional referendum.

Cranley encouraged streetcar supporters to instead push a ballot initiative that doesn’t require the city to continue funding the project.

Councilman P.G. Sittenfeld, who supported a referendum on the parking plan, argued Cranley’s position was hypocritical.

In response to the concerns, Councilwoman Yvette Simpson, a streetcar supporter, said she will have her staff draw up a motion to place the streetcar project on the ballot.

But Councilman Chris Seelbach, who also supports the streetcar, countered that the ballot initiative would not matter if the project is paused and the federal government decides to effectively kill the streetcar by taking back $44.9 million in federal grants that are funding one-third of the project’s costs.

The Federal Transit Administration on Monday stated the grant money is already frozen pending a council decision to advance the project.

On top of the $1.25 million — or $1.74 million, if MPD’s estimate is counted — allocated to pause the project, the suspension would also force the city to pay for unemployment insurance as construction companies lay off 200 workers involved in the project. Streetcar Project Executive John Deatrick estimates that will cost $419,000 if workers are kept unemployed for a month.

So the city could pay nearly $2.16 million to pause the project for a month. In comparison, Deatrick says one month of construction would cost the city $3 million.

The pause costs would also come from the contingency fund for the streetcar project, according to Deatrick. The $7.4 million contingency fund is already counted as part of the $132.8 million project, but it could go unspent if the project continues without complications.

Deatrick on Nov. 21 warned the costs of canceling the streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk costs through November, a potential range of $30.6-$47.6 million in close-out costs and up to $44.9 million in federal grant money that would be lost if the project were terminated.

Supporters of the streetcar project argue it’s necessary to spur economic development along the planned 3.6-mile loop in Over-the-Rhine and downtown. A 2007 study from consulting firm HDR, which was later validated by the University of Cincinnati, found the project would generate a 2.7-to-1 return on investment over 35 years.

Opponents argue the project is far too expensive and the wrong priority for Cincinnati.

“I believe the progress of Cincinnati is going to continue,” Cranley said. “Our future is bullish and bright in downtown and Over-the-Rhine with or without the streetcar.”

A majority of City Council expects to vote in favor of the ordinances at its full meeting on Wednesday at 2 p.m. Council members who oppose the project plan to use the time-out to weigh the costs of cancellation versus the costs of completion.

Money put on hold pending City Council decision on project

Federal grants for the $132.8 million streetcar project are on hold
until City Council votes to continue the project, according to a Dec. 2 email from the Federal Transit Administration (FTA) to Cincinnati officials.

The decision means Cincinnati can no longer tap into $44.9
million in federal grants until Mayor John Cranley and a majority of
the newly sworn-in City Council, both of which have shown opposition to
the streetcar project, agree to continue with ongoing construction.

“As per our telephone conversation, early last week, the
Administrator decided to restrict further access to the Federal project
funds until the FTA received an affirmative signal from the city’s newly
elected officials that the city intends to proceed with the project on
the agreed-upon schedule,” wrote Marisol Simon, FTA regional
administrator in Chicago. “This measure was taken to protect the
taxpayer funds not yet drawn down by the city from being subject to a
potential debt collection action.”

The FTA’s decision shows Cranley and other streetcar
opponents were in the wrong when they insisted they could lobby
the federal government to reallocate the money to other projects, such
as the interchange at Interstate 71 and Martin Luther King Drive.

But the consequence should come as little surprise to
elected officials. In two letters to former Mayor Mark Mallory and a
phone conference with City Council, federal officials warned the city they
would pull the funding if the streetcar project were canceled.

The news comes on the same day City Council plans to vote
to pause the streetcar project as the costs of cancellation are weighed
against the costs of continuing.

Even if council only pauses the project, Streetcar Project Executive John Deatrick says the path
forward is unknown because it’s unclear how the city will fund costs
associated with a pause.

The costs would presumably come out of the project’s contingency
fund, according to Deatrick, but pulling money out of the contingency
fund for a delay or pause changes the scope of the project and could face federal resistance.

On Nov. 21, Deatrick said the costs of canceling the $132.8 million streetcar project could nearly reach the costs of completion
after accounting for $32.8 million in estimated sunk costs through
November, a potential range of $30.6-$47.6 million in close-out costs
and up to $44.9 million in federal grant money that would be lost if the
project were terminated.

Mayor John Cranley and the new City Council were sworn in
yesterday. Two days prior to the ceremony, Cranley announced his
appointments for council committees that play a crucial role in passing
legislation through City Hall, but the choices were not without
controversy as Cranley, a Democrat, snubbed members of his own party for
the two most powerful committees. Councilman Charlie Winburn, a
Republican, will head the Budget and Finance Committee, and
Councilman Christopher Smitherman, an Independent, will take control of
the Law and Public Safety Committee. Democratic council members Chris
Seelbach and Wendell Young also didn’t receive any appointments; both
supported former Vice Mayor Roxanne Qualls in her bid against Cranley
for the mayor’s office. CityBeat covered the new City Council’s priorities in further detail here.

Among the new city government’s first priorities is
canceling the $132.8 million streetcar project, but not if supporters of
the project have anything to say about it. Hundreds of streetcar
supporters yesterday gathered in Washington Park
and walked the planned streetcar route to show their solidarity.
They’re threatening a referendum on any action council takes to pause or cancel
the project, but some are concerned council will attach a funding
measure to legislation that would allow a cancellation or pause ordinance to go
into effect immediately, even if the project makes it onto the November
2014 ballot.

Meanwhile, the company in charge of building the actual streetcars wrote a letter
to former Mayor Mark Mallory on Nov. 30 threatening substantial costs
if the project were canceled. The letter explains that, on top of the
sunk expenses on design work, cancellation would require CAF USA to pull
back on various established deals with subcontractors, which would spur
further costs. For streetcar supporters, the letter renews fears that
canceling the streetcar could lead to litigation from contractors and
subcontractors as they seek their full payday. The legal costs for such
lawsuits would fall on an already-strained operating budget that pays
for day-to-day services such as cops and firefighters instead of a
capital budget that finances capital projects like the streetcar,
according to city spokesperson Meg Olberding.

Councilman Smitherman told The Business Courier that he wasn’t aware his brother’s construction company, Jostin Construction, was involved with the streetcar project, but a 2009 press release
from the local branch of the NAACP shows Smitherman acknowledging his brother’s ties to the project. Still, a Nov. 21 letter
confirms that Jostin pulled out of the project. The connection is
important because it presents a potential conflict of interest for
Smitherman, a streetcar opponent who will likely act as one of the five
necessary votes to pause and potentially cancel the project. It also
raises questions about the validity of Smitherman’s anti-streetcar votes
in the past few years.

Ohio is one of five states whose economy worsened in the past three months,
according to an index from the Federal Reserve of
Philadelphia that combines four economic indicators to gauge states’
economic health.

A Republican and Democrat in the Ohio House proposed using
the $400 million in savings from the federally funded Medicaid
expansion to boost the local government fund,
but it seems most of the Republican leadership in the Ohio Senate
intends to use the savings on a tax cut. The savings are a result of
the Controlling Board’s controversial decision to expand Ohio’s Medicaid program with federal funds, which should shift some Medicaid expenses from the state to the federal level.

Letter comes on eve of council vote on streetcar project

The company in charge of building Cincinnati's streetcars says the city would incur substantial costs if it cancels the streetcar project after it's already gone through some construction and design work.

The Nov. 30 letter from CAF USA Vice President Virginia Verdeja to former Mayor Mark Mallory arrived just one day before Mayor John Cranley, who opposes the streetcar project, and an anti-streetcar majority were sworn in.

"CAF will have to recover all the incurred expenses as well as all the additional cost of cancelling the contract, which would be substantial too," Verdeja writes in the letter.

The letter explains that, on top of the sunk expenses on design work, cancellation would require CAF to pull back on various established deals with subcontractors, which would spur further costs.

For streetcar supporters, the letter renews fears of litigation that could crop up if the project were canceled and contractors decided to pursue their full payday. Those legal costs would fall on the already-strained operating budget that pays for day-to-day services like police and firefighters instead of the capital budget that finances big capital projects like the streetcar, according to city spokesperson Meg Olberding.

On Nov. 21, Streetcar Project Executive John Deatrick warned the costs of canceling the $132.8 million streetcar project could nearly reach the costs of completion after accounting for $32.8 million in estimated sunk
costs through November, a potential range of $30.6-$47.6 million in
close-out costs and up to $44.9 million in federal grant money that
would be lost if the project were terminated.

Earlier on Sunday, hundreds of streetcar supporters rallied in Washington Park and walked the planned streetcar route in support of the project. They're threatening a referendum if the new City Council moves to pause or cancel the project.

City Council plans to vote on pausing the project on Monday. Because of threats from the federal government that a mere delay could lead to the loss of federal grants, streetcar supporters claim a pause would equate to cancellation.

Rally precedes City Council vote to pause and potentially cancel construction

Several hundred people from various local neighborhoods on Sunday gathered at Washington Park and walked along the planned streetcar route to show their support for Cincinnati's $132.8 million streetcar project.

The rally preceded a City Council vote planned for Dec. 2 that would pause the streetcar project as the freshly sworn-in city government reviews the costs of cancellation versus the costs of completion.

Supporters at the rally vowed to hold a referendum on any council action canceling or pausing the streetcar project. If they do, construction could be forced to continue until voters make the final decision on the project in November 2014.

Councilman P.G. Sittenfeld on Nov. 26 announced his support for continuing the streetcar project,
which gave streetcar supporters the four of nine council votes
necessary to block an emergency clause that would make a pause or
cancellation ordinance effective immediately and insusceptible to
referendum.

But Ryan Messer, leader of the "We Believe in Cincinnati" group backing the streetcar project, warned that council could attempt a special legislative maneuver, such as attaching some sort of funding measure to a bill, to immunize a cancellation or pause ordinance from referendum.

Supporters of the streetcar project claim even a pause in the project could effectively act as cancellation. Federal Transit Administration Chief Counsel Dorval Carter on Nov. 25 told council members that the federal government could consider a delay in the project grounds for pulling federal funds.

Streetcar supporters argue the 3.6-mile loop, which will span from The Banks to Findlay Market in Over-the-Rhine, will produce economic development along the route and a 2.7-to-1 return on investment over 35 years — an estimate conceived through a 2007 study from consulting firm HDR that was later validated by the University of Cincinnati.

But opponents of the project, including Mayor John Cranley and at least five of nine council members, say the project is far too costly and the wrong priority for Cincinnati.

Streetcar supporters will hold a press conference the day after council's vote to announce their steps forward.

Mayor John Cranley and the new City Council were officially sworn in on Sunday after nearly a month of contentious political battles that effectively doomed the parking privatization plan and put the $132.8 million streetcar project in danger.

Cranley was joined by three newcomers to City Council — Kevin Flynn, David Mann and Amy Murray — and six re-elected council members — Chris Seelbach, Yvette Simpson, P.G. Sittenfeld, Christopher Smitherman, Charlie Winburn and Wendell Young — as they were sworn in on Dec. 1 at 11 a.m., as required by the city charter.

Already, the new mayor and council plan to move decisively on the streetcar project and parking plan. On Dec. 2, council will hold committee and full meetings to consider pausing the streetcar project as the costs of cancellation are weighed with the costs of continuation.

Council is expected to have five of nine votes to pause the project. But with Seelbach, Simpson, Sittenfeld and Young on record in support of the streetcar project, council might not have the six votes for an emergency clause that would make a pause or cancellation ordinance immediately effective and insusceptible to referendum.

If streetcar supporters successfully place a council action on the November 2014 ballot, construction could be forced to continue on the streetcar for nearly a year until voters make a final decision.

A larger majority of council and Cranley also plan to quickly terminate the parking plan, which would outsource the city's parking meters, lots and garages to the Greater Cincinnati Port Authority and private companies. The previous administration pursued the deal to obtain a lump sum payment of $85 million that would have paid for various development projects around the city and helped balance the city's operating budget.

On Friday, Cranley announced his appointments to the committee chair positions that play a crucial role in deciding what legislation comes before the full body of City Council.

The appointments for two of the most powerful council committees became particularly contentious after Cranley, a Democrat, snubbed members of his own political party to build what he calls a bipartisan coalition. Winburn, a Republican, will take the Budget and Finance Committee chair, and Smitherman, an Independent, will take control of the Law and Public Safety Committee.

Mann, a Democrat who will also act as vice mayor, will lead the newly formed Streetcar Committee. He opposes the streetcar project.

Sittenfeld, a Democrat, will lead the Education and Entrepreneurship Committee; Simpson, a Democrat, will run the Human Services, Youth and Arts Committee; Murray, a Republican, will head the Major Transportation and Regional Cooperation Committee; Smitherman will chair the Economic Growth and Infrastructure Committee; and Flynn, an Independent, will preside over the Rules and Audit Committee.

Democrats Seelbach and Young won't be appointed to any committee chair positions. Both publicly supported former Vice Mayor Roxanne Qualls in her bid against Cranley for the mayor's office.

Cranley on Wednesday also unveiled Willie Carden, current director of Cincinnati Parks, as his choice for the next city manager. With council's approval appearing likely, Carden will replace City Manager Milton Dohoney, who, during his more than seven years of service, fostered Cincinnati’s nationally recognized economic turnaround, the streetcar project and the parking plan.

Beyond the streetcar project and parking plan, a majority of the new council is determined to structurally balance the operating budget without raising taxes. Some council members argue that's much easier said than done, especially since specific proposals for budget balance are few and far between.

The Cincinnati Enquirer abruptly changed its tone about the
streetcar project yesterday, writing in an editorial that the city should continue the project and leaving the newspaper on the opposite side of
Mayor-elect John Cranley on the two main issues of the campaign it endorsed just weeks ago.

Fourteen months after publishing an editorial against the
streetcar project, the three-member Enquirer editorial board yesterday spelled
out why it now supports completing the project, suggesting that a main part of
its opposition — and to Roxanne Qualls as mayor — was the
current administration’s inability to “argue effectively for the project” that
Cranley and other conservatives used to take office during an election that saw
extremely low voter turnout.

CityBeat’s German Lopez noted on Twitter the irony of The
Enquirer now supporting both the streetcar and parking plan while the candidate
it endorsed attempts to unravel both — Cranley already stopped the parking
plan. The comment drew a response from Enquirer Editor Carolyn Washburn, who is
on the newspaper’s editorial board along with Publisher Margaret Buchanan and
Editorial Page Editor David Holthaus.

The editorial includes the following paragraph: “In endorsing Cranley, we said
he would ‘have to rein in his dictatorial tendencies and discipline himself to
be diplomatic, respectful and collaborative.’ What we’ve seen so far is a
matter for concern. Hurling insults at professionals like streetcar project manager
John Deatrick isn’t what we need. Deatrick enjoys a good reputation as someone
who has managed The Banks project and the rebuild of Fort Washington Way. He
needs to stay on the streetcar project.”

The
editorial was published the same day City Council put completing the project
into law and Councilman P.G. Sittenfeld announced his decision to support the
project’s completion, which Lopez pointed out leaves Council short of the six
votes required for an emergency clause that would immediately halt the project without leaving it open to referendum.
Without the emergency clause, streetcar supporters could gather the required signatures to put a 5-4 cancellation
vote to referendum, which would force the city to continue working on the
project until voters decide on it in November.

Mayor-elect Cranley will
hold a vote to stop the project on Monday. With Sittenfeld set to vote against halting the project, Cranley will need either newly elected David Mann
or Kevin Flynn to vote in favor of stopping it. Both are on the record as
being against the project but have left room to consider the financial realities
before making their final decisions.

A story by The Enquirer’s
Mark Curnutte yesterday detailed life expectancy disparities among Cincinnati’s
poor neighborhoods, finding a 20 year difference at times between citizens of
predominantly black or urban Appalachian neighborhoods and people of wealthy white neighborhoods like Mount Lookout, Columbia
Tusculum and Hyde Park. The Cincinnati
Health Department will release more statistics Tuesday and a community
discussion on the issue is set for Jan. 10.

"Some people continue to defend trickle-down theories which
assume that economic growth, encouraged by a free market, will inevitably
succeed in bringing about greater justice and inclusiveness in the world. This
opinion, which has never been confirmed by the facts, expresses a crude and
naive trust in the goodness of those wielding economic power and in the sacra­lized
workings of the prevailing economic system. … Meanwhile, the excluded are still
waiting."

Opponents might not have enough votes to prevent referendum if project is canceled

Councilman P.G. Sittenfeld on Monday announced he will vote to continue the $132.8 million streetcar project.

Sittenfeld’s support for the project means the incoming
City Council might not have the six votes required for an emergency clause
that would immediately halt the project and make a cancellation vote
insusceptible to referendum.

If streetcar supporters successfully put a cancellation
vote to referendum, the project would be forced to continue until the
streetcar once again appears on the ballot in November 2014. The
continuation would sink more costs into the project as construction is
forced to progress for nearly a year.

Sittenfeld’s announcement preceded a vote from the
outgoing City Council to officially write the streetcar project into
law, which means Mayor-elect John Cranley, a streetcar opponent, won’t
be able to take administrative action to halt the project and instead
must bring the project to a City Council vote after he and other newly
elected officials take office on Sunday.

The two remaining swing votes in the incoming council — David Mann, who Cranley on Monday named as his choice for vice mayor,
and Kevin Flynn — previously discussed delaying the project as council
analyzes whether it should permanently cancel or continue with currently
ongoing construction.

But Sittenfeld equated a delay to total cancellation after
warnings from the federal government made it clear that the city could
lose federal funds for the project even if it only delayed progress.

If either Flynn or Mann move to support the streetcar
project, streetcar proponents would gain a five-vote majority on
the nine-member council to continue the project and preclude a
referendum.

Sittenfeld characterized his decision as the better of “two bad choices.”

“We can pursue a project that has never earned broad
public consensus and that has yet to offer a viable and sustainable
budget,” he said at a press conference, “or we can scrub the project and
throw away tens of millions of dollars in taxpayer money, forgo a
massive federal investment and have nothing to show for the enormous
effort and expense.”

To explain his decision, Sittenfeld cited concerns about
how much money has been dedicated to the project at this point,
including $32.8 million in sunk costs through November and a potential
range of $30.6-$47.6 million in close-out costs, according to estimates
from the city. Sittenfeld noted that, at the very least, half of the
city’s $87.9 million share of the project will be spent even if the city
pulls the plug now.

“I did my part to avoid getting us into this reality, but it cannot be wished away,” Sittenfeld said.

There was one major caveat to Sittenfeld’s decision: the
operating costs for the streetcar, which the city estimates at $3.4-$4.5
million a year.

Sittenfeld said the cost must not hit Cincinnati’s
already-strained operating budget and instead must be paid through
fares, sponsorships, private contributions and a special improvement
district that would raise property taxes near the streetcar line.

A special improvement district would require a petitioning
process in which property owners holding at least 60 percent of property frontage near the streetcar line would have to sign in favor of taking
on higher property taxes to pay for the streetcar.

“Ultimately, that’s a decision for the citizens,” Sittenfeld said.

If the special improvement district doesn’t come to
fruition, Sittenfeld cautioned that the streetcar project would be more
difficult to support going forward.

Asked whether Sittenfeld thinks some of the people who
voted for him will see his decision as a betrayal, he responded that his
conclusion shows the “thoughtfulness and carefulness” people expect of
him when it comes to taxpayer dollars, given the costs of cancellation.

For the third time, a representative from the federal government yesterday reiterated to Cincinnati officials that if the $132.8 million streetcar project is canceled, the city would lose $40.9 million in federal funds and another $4 million would be left to the discretion of the state government, which could allocate the money anywhere in Ohio. The repeated reminders are necessary as Mayor-elect John Cranley and the incoming City Council prepare to delay or potentially terminate the project once they take office in December. Federal Transit Administration (FTA) Chief Counsel Dorval Carter said even a mere delay could lead to the federal government restricting or outright terminating the federal grant deals. But Cranley, a long-time opponent of the streetcar project, appeared unfazed by the news at a press conference following Carter's thorough explanation. "If we have to, we’ll give the money back," he said.

Cranley yesterday announced his intent to appoint Councilman-elect David Mann as his vice mayor. Cranley said Mann passed the "bus test," an unfortunate hypothetical scenario in which the mayor dies after being hit by a bus. Cranley also cited Mann's numerous accomplishments, ranging from achievements at Harvard University to previous stints as mayor when top vote-getter in the City Council race automatically assumed the position. Mann promised to work with Cranley to make his administration a success and respectfully disagree but move on when the two men differ.

A Cincinnati Health Department report found life expectancy can vary by 20 years from one part of Cincinnati to another. Black men in particular can expect to live nearly 10 years less than white men. The Health Department said in a press release that it wants to find out why there's such a disparity.

A Quinnipiac University poll shows Republican Gov. John Kasich still ahead of Democratic gubernatorial candidate Ed FitzGerald in a 44 to 37 percent match-up, but FitzGerald is gaining ground. About 71 percent of Ohioans in the poll said they don't know enough about FitzGerald to form an opinion about him, so FitzGerald still has time to build positive name recognition while Kasich has an opportunity to paint his opponent in a negative light before the November 2014 election.

Councilwoman Laure Quinlivan asked the Hamilton County Board of Elections to cancel an automatic recount of the Nov. 5 vote, which Quinlivan was entitled to after she placed 10th place in the City Council race by only 859 votes.

The grand jury for the Steubenville, Ohio, rape investigation indicted four people, including a school superintendent.

Four Ohio corrections officers were fired over the escape of an inmate serving a life sentence for rape, officials announced Monday.

Both mayor-elect and councilman-elect take office on Sunday

Mayor-elect John Cranley on Monday announced he will appoint Councilman-elect David Mann to act as vice mayor.

“Quite simply, he passes the bus test,” Cranley said at a
press conference, suggesting that Mann is capable of doing his job if the mayor were to die after getting hit by a bus.“He’s the one guy who can serve as mayor and
preserve the city’s heritage.”

Cranley cited Mann’s numerous accomplishments, including his
time with the prestigious Harvard Law Review journal and previous stints
as mayor when the top vote-getter in the City Council race
automatically assumed the position.

Mann and Cranley promised to work together, even if they don’t agree on every issue.

“Your success will be the city’s success,” Mann said to Cranley. “When we disagree, we’ll disagree with respect and go forward.”

Speaking on priorities he shares with Cranley, Mann
outlined his intentions to structurally balance the budget, cancel the
parking plan, investigate whether the city can afford to terminate the
streetcar project, tackle the city’s high poverty rates and refocus city
funding to benefit all local neighborhoods.

Cranley and Mann will officially take office on Sunday, along with the rest of the new City Council.